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Eco4223 Exam 1 Questions And Answers With Verified Solutions 100% Correct!!!
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Eco4223 Exam 1 Questions And Answers With Verified Solutions 100% Correct!!!
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Eco4223 Exam 1 Questions And Answers With Verified Solutions 100% Correct!!! What is money? - ANSWER✔✔ It is a commonly used medium of exchange What are the three functions of money? - ANSWER✔✔ Medium of exchange (necessary, but not sufficient), store of value (necessary, but trivial), and unit of account (trivial) What is inside money? - ANSWER✔✔ (Bank money) is a claim to some other asset that is used to make payments What is outside money? - ANSWER✔✔ (Base money) is a money that is used for final settlement What is commodity money? - ANSWER✔✔ A good that is used as money (gold, silver, salt) What is fiat money? - ANSWER✔✔ An item that has no use apart from being money (dollar, euro) What are the two views on why we use money? - ANSWER✔✔ Historical materialist view and economic view What is the historical materialist view on why we use money? - ANSWER✔✔ Money is a revenue -raising Technology introduced by governments to collect taxes more efficiently What is the economic view on why we use money? - ANSWER✔✔ Money is a productive Technology that reduces transaction costs and hence, facilitates exchange What is the state theory of money? - ANSWER✔✔ (Chartalism) maintains that money was created by the government What are the tools governments use to determine medium of exchange? - ANSWER✔✔ Public receivability, legal tender status, forced money laws, and ban alternatives What is public receivability? - ANSWER✔✔ The government commits to accepting taxes and making purchases with it What is legal tender status? - ANSWER✔✔ Courts are required to recognize the item as satisfactory payment and monetary debt, and can settle disputes by requiring payment in item What is a forced money law? - ANSWER✔✔ The government punishes those refusing to accept its preferred money What is banning alternative monies? - ANSWER✔✔ The government punishes those using some alter native moneyThe benefits of buying summaries with Stuvia:
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